Motorola Solutions Reports Third-Quarter 2026 Financial Results
Motorola Solutions, Inc. (MSI) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Motorola Solutions Reports Third-Quarter 2026 Financial Results Company raises full-year revenue and earnings outlook again and increases full-year cash flow expectations • Sales of $3.4 billion, up 12% versus a year ago ◦ Products and Systems Integration sales up 12
How this was made
The 30-second read
Why it matters
The earnings beat and raised outlook are likely to attract buying, but margin pressure and higher taxes could limit upside.
Market read
The release provides fresh, material guidance that can move MSI and related industrial stocks.
What to watch
Higher tax rates and lower operating cash flow may temper enthusiasm despite revenue growth.
Motorola Solutions Reports Third-Quarter 2026 Financial Results Company raises full-year revenue and earnings outlook again and increases full-year cash flow expectations
Sales rose 12%, both operating segments delivered double-digit growth, non-GAAP operating earnings increased 19%, record backlog reached $16.6 billion, and the company raised full-year revenue, non-GAAP EPS and operating cash flow expectations.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 net salesGAAP | $3.38B | – | 12 % |
| Q3 2026 net sales from productsGAAP | $2.00B | – | – |
| Q3 2026 net sales from servicesGAAP | $1.38B | – | – |
| Q3 2026 gross marginGAAP | $1.77B | – | – |
| Q3 2026 gross margin as a percentage of net salesGAAP | 52.4 % | – | – |
| Q3 2026 operating earningsGAAP | $777M | – | 1 % |
| Q3 2026 operating marginGAAP | 23.0 % | – | – |
| Q3 2026 non-GAAP operating earningsnon-GAAP | $1.10B | – | 19 % |
| Q3 2026 non-GAAP operating marginnon-GAAP | 32.5 % | – | – |
| Q3 2026 net earnings attributable to Motorola Solutions, Inc.GAAP | $512M | – | – |
| Q3 2026 diluted EPSGAAP | $3.06 | – | (8) % |
| Q3 2026 non-GAAP diluted EPSnon-GAAP | $4.69 | – | 16 % |
| Q3 2026 GAAP effective tax rateGAAP | 24.2% | – | – |
| Q3 2026 non-GAAP effective tax ratenon-GAAP | 21.8% | – | – |
| Q3 2026 operating cash flowGAAP | $662M | – | – |
| Q3 2026 free cash flownon-GAAP | $589M | – | – |
| Q3 2026 capital expendituresGAAP | $73M | – | – |
| Q3 2026 organic revenuenon-GAAP | $3.05B | – | 5 % |
| Nine months ended October 3, 2026 net salesGAAP | $9.22B | – | 11 % |
| Nine months ended October 3, 2026 gross marginGAAP | $4.81B | – | – |
| Nine months ended October 3, 2026 gross margin as a percentage of net salesGAAP | 52.1 % | – | – |
| Nine months ended October 3, 2026 operating earningsGAAP | $2.11B | – | – |
| Nine months ended October 3, 2026 non-GAAP operating earningsnon-GAAP | $2.91B | – | – |
| Nine months ended October 3, 2026 net earnings attributable to Motorola Solutions, Inc.GAAP | $1.44B | – | – |
| Nine months ended October 3, 2026 diluted EPSGAAP | $8.57 | – | – |
| Nine months ended October 3, 2026 non-GAAP diluted EPSnon-GAAP | $12.46 | – | – |
| Nine months ended October 3, 2026 operating cash flowGAAP | $1.58B | – | – |
| Nine months ended October 3, 2026 free cash flownon-GAAP | $1.39B | – | – |
| Nine months ended October 3, 2026 organic revenuenon-GAAP | $8.43B | – | 3 % |
| Ending backlogother | $16.6B | – | up 14% or $2.1 billion |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Q3 2026 Products and Systems Integrationdriven by growth in Mission Critical Networks ("MCN") and Video Security and Access Control ("Video") | $2.12B | – | 12 % |
| Q3 2026 Software and Servicesdriven by growth in MCN, Command Center and Video | $1.26B | – | 13 % |
| Nine months ended October 3, 2026 Products and Systems IntegrationNo segment revenue driver was separately stated for the nine-month period. | $5.59B | – | – |
| Nine months ended October 3, 2026 Software and ServicesNo segment revenue driver was separately stated for the nine-month period. | $3.64B | – | – |
Fourth quarter 2026 and full-year 2026 outlook
- RevenueFourth quarter 2026: revenue growth of approximately 13% compared to the fourth quarter of 2025. Full-year 2026: revenue of approximately $13.050 billion.
- Tax rateFourth quarter 2026: non-GAAP effective tax rate of approximately 22.5%. Full-year 2026: non-GAAP effective tax rate between 21.5% and 22%.
- NoteFourth quarter 2026 non-GAAP EPS between $5.47 and $5.52 per share.
- NoteFourth quarter 2026 assumes approximately 168 million of fully diluted shares.
- NoteFull-year 2026 non-GAAP EPS between $17.94 and $17.99 per share.
- NoteFull-year 2026 assumes approximately 168 million of fully diluted shares.
- NoteFull-year 2026 operating cash flow expectations of $3.050 billion.
Capital returns
- During the quarter, the company paid $200 million in cash dividends.
- During the quarter, the company repurchased $94 million of common stock at an average price of $457.07.
- The company announced a $2 billion increase to the share repurchase authorization during the quarter.
- During the nine months ended October 3, 2026, purchases of common stock were $543 million and payments of dividends were $602 million.
What drove it
- Q3 sales growth was driven by growth in North America and International.
- Revenue growth related to acquisitions was $211 million and foreign currency tailwinds were $11 million in the quarter.
- Record Q3 orders in all three technologies drove record ending backlog.
- Non-GAAP operating margin expansion was driven by higher sales and improved operating leverage, partially offset by higher supply chain costs.
- The company recognized a favorable adjustment of approximately $70 million within Cost of sales during the nine months ended October 3, 2026 related to probable recovery of a portion of IEEPA tariff refunds.
Concerns
- GAAP operating margin declined to 23.0% from 25.6%, primarily driven by an increase to the contingent Silvus earnout due to strong performance of the business.
- Operating cash flow and free cash flow decreased due to higher tax and interest payments during the quarter, primarily offset by higher earnings, net of non-cash charges.
- The company is experiencing higher costs for memory in its products due to substantial market demand driven by AI.
- The company expects inventory levels to remain elevated while mitigating the dynamic supply chain environment.
- The global trade landscape continues to shift rapidly, including evolving tariffs and import/export regulations, restrictions around rare earth minerals, trade barriers and trade disputes.
What to watch
- Delivery against fourth-quarter revenue growth of approximately 13% compared to the fourth quarter of 2025.
- Delivery against fourth-quarter non-GAAP EPS between $5.47 and $5.52 per share.
- Conversion of the record $16.6 billion ending backlog and demand across MCN, Command Center and Video.
- Memory-cost inflation, supply-chain volatility and the company’s inventory levels.
- Integration of D-Fend and DeepNeuronic.
Balance sheet and cash flow
- Cash and cash equivalents were $774 million as of October 3, 2026, compared with $1,165 million as of December 31, 2025.
- Short-term borrowings were $750 million and long-term debt was $9,361 million as of October 3, 2026.
- Inventories, net were $1,511 million as of October 3, 2026, compared with $983 million as of December 31, 2025.
- The company closed the acquisition of D-Fend during the quarter for $1.3 billion, net of cash acquired, primarily funded through $950 million of new long-term senior notes.
- The company issued a new $300 million 364-day term loan and repaid $300 million of the 364-day term loan issued for the Silvus acquisition upon its maturity during the quarter.
- The company acquired DeepNeuronic for $29 million, net of cash acquired.
Analysis
Motorola Solutions reported a strong third quarter, with GAAP net sales of $3,376 million, up 12 %, and double-digit sales growth in both operating segments. Products and Systems Integration sales were $2,118 million, up 12 %, driven by MCN and Video. Software and Services sales were $1,258 million, up 13 %, driven by MCN, Command Center and Video. Acquisitions contributed $211 million of quarterly revenue growth, while foreign currency tailwinds contributed $11 million.
Profitability was mixed on a GAAP basis but improved on the company’s non-GAAP measures. GAAP operating earnings increased 1 % to $777 million, while GAAP operating margin declined to 23.0 % from 25.6 %, primarily because of an increase to the contingent Silvus earnout. GAAP diluted EPS declined 8 % to $3.06. Non-GAAP operating earnings rose 19 % to $1,096 million, non-GAAP operating margin increased to 32.5 % from 30.5 %, and non-GAAP diluted EPS increased 16 % to $4.69. Higher sales and improved operating leverage supported the non-GAAP margin expansion, partially offset by higher supply chain costs.
Demand indicators remained notably strong. Ending backlog reached a record $16.6 billion, up 14% or $2.1 billion from the year-ago quarter, driven by record Q3 orders in all three technologies. Products and Systems Integration backlog was up $635 million, or 18%, and Software and Services backlog was up $1.4 billion, or 13%. The company also completed the D-Fend acquisition for $1.3 billion, net of cash acquired, and acquired DeepNeuronic for $29 million, net of cash acquired.
Cash generation was lower in the quarter despite higher earnings. Operating cash flow was $662 million compared to $799 million, and free cash flow was $589 million compared to $733 million, reflecting higher tax and interest payments. Motorola Solutions paid $200 million in cash dividends, repurchased $94 million of common stock, and announced a $2 billion increase to its share repurchase authorization. Cash and cash equivalents were $774 million, while long-term debt was $9,361 million as of October 3, 2026.
Management raised full-year expectations again, now targeting revenue of approximately $13.050 billion, non-GAAP EPS between $17.94 and $17.99 per share, and operating cash flow of $3.050 billion. Fourth-quarter guidance calls for revenue growth of approximately 13% and non-GAAP EPS between $5.47 and $5.52 per share. The principal operating items to monitor are elevated memory costs, global trade and supply-chain volatility, and elevated inventory levels as the company works to meet customer demand.
Management, verbatim
Q3 was another outstanding quarter, with double-digit revenue growth across both segments and all three technologies. We continue to see exceptionally strong demand across our safety and security solutions, driving record Q3 orders and an all-time record ending backlog. As a result, we’re raising our revenue and earnings outlook again and increasing our cash flow expectations for the full year.
Greg Brown, chairman and CEO, Motorola Solutions
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so comparisons of actual results with prior guidance are unavailable.
- Fourth-quarter 2026 revenue in dollars, gross margin and operating expenses guidance were not provided.
- Full-year 2026 GAAP EPS, GAAP operating income, GAAP operating margin and free cash flow guidance were not provided.
- Quarter-end total debt was not separately reported as a single total line item.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Motorola Solutions reported Q3 2026 results, highlighting double‑digit revenue growth, record backlog, and acquisitions.
Ticker impact
Motorola Solutions raised full-year revenue and earnings outlook and increased cash flow expectations in its Q3 2026 earnings release.
likely upward pressure as investors price in higher revenue and EPS forecasts
The company posted 12% revenue growth, beat prior quarter EPS, and issued raised guidance, which typically drives buying interest.
Market effects
Strong results may lift the broader industrial and public‑safety equipment sector.
U.S. industrials could see modest gains on the back of the guidance raise.
Limited to U.S. markets; no immediate global macro effect.
Counterpoint
If the raised guidance is already priced in, the stock could face a short‑term pull‑back.
Key entities
- companyMotorola Solutions, Inc.
U.S. public‑company providing public‑safety communications and security solutions.
- companyD‑Fend Solutions
Counter‑drone technology firm acquired by Motorola Solutions.
